Reply #8: Not as bad as you would expect though [View All]

[Frodo]

I wonder what the spin is?


Keep in mind that the headlines are not the real story on this one. Growth was NOT weaker than expected... it was the INFLATION was much HIGHER than expected.

The GDP figure is NET of the price deflator. So last month actually reported 7% growth... minus a 2.6% measurement of inflation... to give us a NET GDP growth of 4.4%.

Now the "final" revision comes in at a NET GDP growth of "only" 3.9% (not that 3.9 is anything to sneeze at).... with the deflator shooting up to 3.8%.

That gives you a GROSS GDP growth increase to 7.7% from 7.0%.


Things actually grew FASTER than expected. But the dramatic increase in inflation more than offset that.